Visa to Resell Anti-Fraud Service from ID Analytics

Isabelle Lindenmayer
August 24, 2005
American Banker

Following are excerpts taken from the August 24, 2005 edition of American Banker.

Visa U.S.A. will announce today that it will offer its bank members another way to catch identity thieves in the act.

Early next year the San Francisco association will begin reselling the ID Score service from ID Analytics Inc. It is meant to help them determine if people applying for credit are who they claim to be.

ID Analytics compares the information in its database with information on new credit applications, looking for fraudulent patterns to keep thieves from using stolen information to take out credit in someone else's name.

Member banks "are very interested in what types of tools we can provide" to prevent identity theft, said Jean Bruesewitz, a senior vice president of processing at Visa. It "is top of mind for everyone in the industry."

Bruce Hansen, ID Analytics' chief executive and chairman, said it would form "more partnerships in other vertical industries" but "not in the card business."

Visa will send credit applications to ID Analytics, which will generate scores and pass them back to the bank through Visa. The higher the score on a scale of zero to 999, the fishier the application.

According to a joint study by Visa, ID Analytics, and three large issuing banks conducted over the past five months, banks that use the ID Score service in combination with the clearing-house service may find 17% to 34% more fraudulent applications.

"Anytime you can drive up your ability to prevent fraud, you get people's attention," Mr. Hansen said. "You're talking about a significant problem that also has a reputational effect."

ID Analytics maintains a large database of encrypted consumer information provided by its customers, which include six of the top 10 credit card issuers. It receives 5 million identity attributes - such as Social Security numbers, names, and addresses - a day. The number should jump as Visa issuing banks sign up for the service, the company says.

"We're aggressively getting our technology integrated at all the right points in all the right industries," Mr. Hansen said.

The company recently announced partnerships with Equifax Inc., the Atlanta credit bureau, as well as Intersections Inc. and Carreker Corp., both providers of technology to financial services companies.